Zomato Slapped With GST Demand, Penalty Order Worth Rs 804 Crore

Zomato Ltd. has been issued an order by the Maharashtra tax authority to pay pending goods and services tax dues of Rs 401 crore, along with a penalty of Rs 401 crore, according to an exchange filing on Thursday.

Cumulatively, the food delivery aggregator would be required to pay Rs 802 crore, as per the order passed by the joint commissioner of CGST and Central Excise, Thane Commissionerate, Maharashtra.

The GST demand pertains to the period between Oct. 29, 2019, and Mar. 31, 2022, Zomato said in the regulatory filing. It has been issued over alleged "non-payment of GST on delivery charges with interest and penalty thereon.".

The company noted that it would be challenging the order issued by the tax authority.

"We believe that we have a strong case on the merits, which is backed by opinions from our external legal and tax advisors. The company will be filing an appeal against the order before the appropriate authority," it stated.

Zomato had also received a GST demand order in September over alleged non-payment of GST on delivery charges. Combined with interest, the demand order amounted to Rs 17.7 crore. The notice was issued by West Bengal's tax authority and pertained to the period between April 2021 and March 2022.

Zomato, which is the leading player in India's food delivery market, had posted a 30% year-on-year decline in its September-quarter net profit to Rs 176 crore. The company's revenue from operations, however, had increased 14% year-on-year to Rs 4,799 crore.

Shares of Zomato on Thursday closed 2.36% lower at Rs 284.9 apiece on the BSE, compared to a 0.29% decline in the benchmark Sensex.